Case-Shiller Index Takes a Dive

According to the S&P/Case-Shiller Index that tracks 20 major U.S. markets, the seasonally adjusted month-over-month drop was 0.8 percent, the largest decline since April 2009. The 10-city index was down 0.7 percent.

December 1, 2010
Dees Stribling, Contributing Editor

Courtesy Flickr Creative Commons user pnwra

“Bounce along the bottom” was how Karl E. Case characterized the housing market on Bloomberg Television after the index that bears his name, along with Shiller, reported price declines in September. According to the S&P/Case-Shiller Index that tracks 20 major U.S. markets, the seasonally adjusted month-over-month drop was 0.8 percent, the largest decline since April 2009. The 10-city index was down 0.7 percent.

All of the metro areas on the 20-city list lost ground during September compared with August, except for Washington DC, which was up 0.3 percent, probably due to job growth; and Las Vegas, which gained 0.1 percent, probably due to bouncing dead cats. Metro Cleveland saw a 3 percent month-over-month drop, which was the worst month-over-month performance on the index.

Fifteen of the 20 cities on the index have seen price declines since September 2009, with metro Chicago taking the hardest hit at 5.6 percent down (for once it wasn’t somewhere warm most of the year). The average U.S. housing price dropped 1.5 percent compared with 3Q09, according to the index, and prices are nearly 30 percent below their bubble peak in mid-2006.

Consumer Confidence Edges Up

Despite the housing market’s woes, consumer confidence improved in November, according to the Conference Board. Not that confidence is all that good: the index stands at 54.1, up from 49.9 in October, but 100 = 1985 (Americans were a confident lot that year after the hard late ’70s and early ’80s; it was Morning in America).

Still, the confidence uptick might be good news for retailers. “Consumer confidence is now at its highest level in five months, a welcome sign as we enter the holiday season,” said Lynn Franco, director of the Conference Board Consumer Research Center, in a statement on Tuesday. “Expectations, the main driver of this month’s increase in confidence, are now at the highest level since May.”

Preliminary estimates for sales on “Cyber Monday” seemed optimistic, too. According to Coremetrics, a company that tracks Internet sales, on-line sales on Monday were 19.4 percent higher than the same day in 2009. Discounts were a-plenty and that all-important free shipping were major lures, and the average on-line shopper spent $194.89, up 8.3 percent from $180.03 last year.

Fannie Holds Fewer Bad Mortgages

The number of “seriously delinquent” single-family residential mortgages held by Fannie Mae, that is, those over 90 days past due, dropped to 4.56 percent in September for the seventh straight monthly decline. It’s also the first time that number saw a year-over-year decline — down from 4.72 percent — since before the recession.

That doesn’t mean Americans are feeling any better about homeownership, however. In its third quarter 2010 National Housing Survey, Fannie Mae also recently noted in that an overwhelming majority of Americans believe it’s a bad time to sell a home–85 percent, up 2 percentage points since 2Q10.

Wall Street had another moderately down day on Tuesday, perhaps because of Euro-fretting, with the Dow Jones Industrial Average slipping 46.47 points, or 0.42 percent. The S&P 500 lost 0.61 percent and the Nasdaq declined 1.07 percent.